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TMI Blog2019 (1) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... al High Court in a recent decision in the case of Samtel India Ltd. [2018 (7) TMI 660 - DELHI HIGH COURT] has reexamined the decision of Reliance Petroproducts Pvt.Ltd. [2010 (3) TMI 80 - SUPREME COURT] and held that unless the details supplied in the return of income are not accurate, not exact or correct, not according to truth or erroneous, it cannot be said to be inaccurate particulars. In the case under appeal before us, admittedly, the particulars of expenditure incurred by the assessee have been accepted to be true and accurate by the Assessing Officer himself because he has not doubted the genuineness of the expenditure incurred. He only disputed whether the expenditure was incurred for normal business of manufacturing or for research work. This claim is also accepted by the learned CIT(A) that the expenditure was incurred for research purposes. The disallowance was made only because the deduction was allowed at a lesser rate than what was claimed by the assessee no inaccurate particulars deemed to be given - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... to be fulfilled under Section 35(2AB). In view of above, it is clear that the assessee has claimed wrong deduction to the extent of ₹ 61,68,157/- thereby concealing of its income as well as furnishing of inaccurate particulars of his income with a view to evade taxes. A penalty of ₹ 22,57,083/- is therefore imposed under Section 271(1)(c) of the IT Act as per following calculation :" 4. At the time of hearing before us, it is stated by the learned counsel that the assessee derives income from manufacturing of door trims, roof head liner for automobiles and body parts for scooters etc. That during the year under consideration, the assessee has incurred certain capital as well as revenue expenditure on research and development for developing its products and claimed deduction u/s 35(2AB) which is permissible at the rate of 150% of the actual expenditure incurred. The Assessing Officer treated the expenditure to be genuine but held that it was not incurred for any research purposes and therefore, allowed deduction at the rate of 40% on the purchases of two machineries and allowed 100% of the revenue expenditure. That the learned CIT(A) accepted the assessee's claim t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the return cannot amount to furnishing inaccurate particulars." 7. That Hon'ble Jurisdictional High Court has considered this decision and some other decisions in the case of Samtel India Ltd. (supra) and their Lordships held as under :- "11. A glance at the Section 271(1)(c) presents two essentials -"concealment" and "furnishing inaccurate particulars of income". The current appeal is, however, only concerned with the interpretation of the phrase "furnishing inaccurate particulars of income." The Revenue claims that by furnishing a wrong claim the assessee has "furnished inaccurate particulars of income."The meaning of the phrase "furnishing inaccurate particulars of income" was explained by the Supreme Court in the case of Commissioner of Income Tax vs Reliance Petroproducts Pvt Ltd [(2010)322ITR158] by bifurcating "particulars" and "inaccurate" where particular was explained to include the details of a claim, or the separate items of an account. The word "inaccurate" was explained as "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript." When these words are read in conjunction with each other then it ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t accepted by the Assessing Officer for any reason, the assessee would invite penalty under section 271(1)(c)." 13. The intention of the Parliament cannot be taken to have been to penalize everyone who makes a wrong claim for deduction. The legislature does not intend to penalize every person whose claim is disallowed. This is not the aim of the legislature. The Tribunal in the facts of this case, therefore, correctly reached this conclusion. The question of law is answered in favour of the assessee and against the Revenue; therefore, the appeal has no merit and is dismissed." 8. Learned Senior DR has relied upon the decision of Hon'ble Jurisdictional High Court in the case of Morgan Finvest (P.) Ltd. (supra), wherein their Lordships sustained the levy of penalty u/s 271(1)(c) holding the claim of depreciation not bona fide with the following finding :- "Even if it is assumed that the assessee continued to remain the owner of the property throughout the year, the other condition of Section 32, that the property should have been used for the purpose of the assessee's business has not been satisfied. There is no proof that the director resided in the property and it was only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court. It was, in these circumstances, that the Tribunal came to the conclusion that the assessee had neither concealed the income nor filed inaccurate particulars thereof. In recording this finding, the Tribunal felt that if two views of the claim of the assessee were possible, the explanation offered by it could not be said to be false. This, however, is not the factual position in the case before us. The facts of the present case thus are clearly distinguishable. It is true that mere submitting a claim which is incorrect in law would not amount to giving inaccurate particulars of the income of the assessee, but it cannot be disputed that the claim made by the assessee needs to be bona fide. If the claim besides being incorrect in law is mala fide, Explanation 1 to section 271(1)(c) would come into play and work to the disadvantage of the assessee." 11. Thus, their Lordships of Hon'ble Jurisdictional High Court have held that mere submitting a claim which is incorrect in law would not amount to giving inaccurate particulars of income of the assessee but the claim made by the assessee needs to be bona fide. If the claim besides being incorrect in law is mala fide, Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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